I had a rental property in 2023 that I stopped renting at the end of September. During October, November, and December I did some major repairs like a new roof, foundation repair, trim and siding repair, exterior paint, gutter replacement, and interior paint. I paid the 2023 property taxes in January 2024 and listed the home for sale in January as well. The closing of the sale happened in Feb 2024. How am I supposed to account for all these rehab expenses in 2023? Do they get added to the properties basis and depreciated over the last few months of the year? Or are they considered selling expenses and get added to the basis of the property for calculating capital gains tax on my 2024 taxes with no depreciation in 2023? And what about the 2023 property taxes paid in January 2024? Should I pro-rate them (75% against rental income and 25% as holding cost added to basis) I have other misc expenses as well that were incurred during the rehab like travel and utilities. What do I do with those?
